Sholette Manufacturing Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard…

8. Sholette Manufacturing Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) at $7.00 per MH. During the month, the actual total variable manufacturing overhead was $42,250 and the actual level of activity for the period was 6,500 MHs. What was the variable overhead rate variance for the month?

$464 Favorable

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$464 Unfavorable

$3,250 Unfavorable

$3,250 Favorable

9. Sperazza Corporation produces large commercial doors for warehouses and other facilities. In the most recent month, the company budgeted production of 5,600 doors. Actual production was 6,000 doors. According to standards, each door requires 5.2 machine-hours. The actual machine-hours for the month were 31,980 machine-hours. The standard supplies cost is $1.60 per machine-hour. The actual supplies cost for the month was $47,011. Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is:

$5,767 F

$5,767 U

$1,248 U

$1,248 F

6.t he management of Kabanuck Corporation is considering dropping product V41B. Data from the company’s accounting system appear below:

  Sales$921,000

Variable expenses$404,500

Fixed manufacturing expenses$516,500

Fixed selling and administrative expenses$335,000 

All fixed expenses of the company are fully allocated to products in the company’s accounting system. Further investigation has revealed that $206,500 of the fixed manufacturing expenses and $117,500 of the fixed selling and administrative expenses are avoidable if product V41B is discontinued.

What would be the effect on the company’s overall net operating income if product V41B were dropped?

Overall net operating income would decrease by $192,500.

Overall net operating income would decrease by $60,500.

Overall net operating income would increase by $60,500.

Overall net operating income would increase by $192,500.

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